Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Zim fails to meet tobacco sales target

Zim fails to meet tobacco sales target

By Roadwin Chirara, Business Writer
Monday, 24 October 2011 09:28

HARARE – Zimbabwe’s failure to meet its tobacco sales by 40 million 
kilogrammes (kg) has also affected its revenue collections in the third 
quarter, Zimbabwe Revenue Authority (Zimra) chairman Sternford Moyo has 

The country auctioned off 140 million kg’s during the past tobacco-selling 
season against a projected 180 million while its total revenue collections 
increased by three percent to $660,7 million for the quarter.

“The price of tobacco which fell as the season progressed, as compared to 
the price that prevailed at the beginning of the season.

“The lower collections from Tobacco Levy are attributed to the fact that the 
country produced lower volumes than originally projected,” Moyo said.

In the period under revenue, Zimra’s major contributor value added tax (Vat) 
missed its set targets by six percent to close at $225,5 million.

“Vat collections fell short of the Ministry of Finance target because 
capacity utilisation for the local industry is gradually picking up hence 
Vat on local sales did not perform optimally.

“Vat on local sales contributed 44 percent of total Vat revenue while the 
remainder was from Vat on imports,” Moyo said.

He said Zimra’s individual tax collections had increased by 20 percent to 
$148,6 million against a targeted $123,7 million.

“This constituted a positive variance of 20 percent against target. 
Improvements in local capacity utilisation had necessitated the recruitment 
of more employees, hence the improvement in the performance of the revenue 
head,” the Zimra chairman said.

He however said the revenue collector had also failed to meet its corporate 
tax collections by 16 percent which he attributed to company operational 

“Collections were $67,9 million against a target of $81,1 million as many 
companies are still affected by liquidity challenges, owing to lack of lines 
of credit, resulting in them operating with low working capital,” Moyo said.

“In addition, constant power outages are working against productivity in 
many companies and this is negatively affecting profitability,” he added.

Moyo said Zimra had realised $85,2 million in customs duty collections 
against a projected target of $89,2 million.

“The quarter was marginally missed because the local industry has now 
significantly improved in terms of capacity utilisation. As a result of this 
improvement, the economy is no longer fully dependent on imports,” he said.

Moyo said increased fuel demand due to a recovering industry has seen its 
excise duty collections surpass its targets by 43 percent to $81,1 million.

“Excise on fuel contributed 67 percent of the total Excise Duty collected.

“Beer came second with a percentage contribution of 22 percent,” the revenue 
body chairman said.

“As the economy recovers, consumers are getting more disposable income to 
spend on excisable product,” he said.

Zimbabwe tobacco production still remains below peak levels of about 236 
million kilograms achieved in 2000
Zimbabwe earned $347,8 million from tobacco sales last year, according to 
industry regulator, Tobacco Industry Marketing Board (TIMB) with China 
emerging as the main buyer of the crop.

Zimbabwe is the world’s sixth-largest exporter of the flue-cured tobacco and 
behind Brazil, India, the US, Argentina and Tanzania.


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